The US Investment Advisers Act 1940 was amended on 21 July 2010 as part of the Dodd-Frank reforms. The amendments mean that many investment advisers to private investment funds will now have to register with the US Securities and Exchange Commission (SEC). The provisions may apply to some non-US real estate fund managers – where they have an office or presence in the US, or have US investors or US entities they manage.

Applying the US rules to real estate funds is a matter of interpretation – the relevant law is taken from other statutes, there is limited SEC guidance and analysis will be fact specific. A table showing the key questions a non-US real estate fund manager needs to consider can be viewed here.

If the answer to all the above three questions is yes, there are two possible exemptions relevant for non-US real estate fund managers. The foreign private adviser exemption is a complete exemption with no ongoing compliance obligation. However, the threshold for this exemption is US $25m assets under management. Therefore, the private fund adviser exemption is likely to be the most relevant. A fund manager who falls under the private fund adviser exemption is not required to register with the SEC, but will be an “exempt reporting adviser” (ERA) subject to SEC record-keeping and reporting requirements. The SEC can also examine ERAs in its discretion.

Click here to view table